Two Big Banks in Nigeria to Merge as CBN Recapitalisation Ends in 21 Days
- Tension rises as two major banks discuss potential merger before CBN's recapitalisation deadline
- This comes as $706 million in foreign investments flood Nigeria's banking sector amid recapitalisation efforts
- Major consolidation feared if undercapitalised banks fail to meet CBN's new capital requirements
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Fresh tension is building across Nigeria’s financial sector as rumours swirl that two major Tier-1 banks may be preparing for a strategic merger ahead of the recapitalisation deadline set by the Central Bank of Nigeria (CBN).
With barely three weeks remaining before the regulatory window closes, industry insiders say confidential discussions are ongoing between two of the country’s largest lenders as they scramble to meet the new capital requirements introduced by the apex bank.
Source: Getty Images
Although the talks have not been officially confirmed, the speculation reflects the intense pressure banks face to shore up their balance sheets before the deadline expires.
Sources familiar with the matter say the potential merger remains highly confidential, with both regulators and the banks involved maintaining silence.
$706 million foreign investment flows into banks
However, analysts say such consolidation would not come as a surprise given the massive capital thresholds now required under the recapitalisation programme championed by the CBN governor, Olayemi Cardoso.
According to a report by Daily Sun, while merger talks dominate market conversations, fresh data suggests that international investors are increasingly betting on Nigeria’s banking sector.
A recent report by Proshare estimates that about $706.84 million in foreign capital has flowed into Nigerian banks during the ongoing recapitalisation exercise.
According to the report, offshore investors are particularly targeting institutions considered systemically important and well-positioned for expansion after the recapitalisation programme ends.
The research firm noted that the inflow highlights growing global interest in Nigeria’s financial services sector.
Analysts say the investments are also a sign that international funds believe Nigerian banks could become stronger and more competitive once the recapitalisation process is completed.
Regulatory approval still required
Despite the growing buzz, banking executives warn that any merger or major capital injection must pass through strict regulatory procedures before becoming official.
Such transactions would require filings with regulators, approvals from shareholders and disclosures to the Nigerian Exchange Limited.
Industry insiders, therefore, caution that until formal announcements are made, merger rumours should be treated as market speculation.
Still, the conversations highlight how urgently banks are racing to secure fresh capital before the deadline.
Financial analysts say the final weeks could witness a surge in fundraising activity, including rights issues, private placements, strategic partnerships and potential consolidation deals.
Banks rush to meet capital targets
Several banks have already moved quickly to strengthen their capital positions ahead of the deadline.
One example is Sterling Financial Holdings Company Plc, which completed its recapitalisation programme early after raising N191.79 billion through rights issues, private placements and public offers between December 2024 and October 2025.
The group later secured final regulatory approvals in January 2026, placing its subsidiaries — Sterling Bank and The Alternative Bank — comfortably above the N200 billion minimum capital requirement for a national banking licence.
Another lender that recently announced compliance is Optimus Bank.
The bank revealed last week that it had successfully raised its paid-up capital to N200 billion, meeting the regulatory benchmark just weeks before the deadline.
The milestone is particularly striking given that the bank had a capital base of only N35 billion in 2023, meaning it had to raise about N165 billion to meet the new requirement.
Some banks are still racing against time
Not all lenders are comfortably above the threshold.
FCMB Group is still reportedly undergoing regulatory validation to determine whether it qualifies for an international banking licence.
The group currently has a capital base of N288.96 billion, well below the N500 billion requirement needed for international banking operations.
To close the gap, the financial group launched a two-phase public offer to attract fresh funds from investors.
N4.05 trillion already raised
Earlier, Cardoso disclosed that Nigerian banks have collectively raised about N4.05 trillion under the recapitalisation programme.
Speaking during the 304th meeting of the Monetary Policy Committee in Abuja, he explained that the funds came from both domestic and international investors.
According to him, 71.67 per cent of the capital raised was mobilised locally, while 28.33 per cent came from foreign investors.
The CBN governor also revealed that 20 banks have already met the new capital requirements, while 13 others are at advanced stages of raising funds.
Final weeks could trigger major consolidation
Analysts say the conversation within the banking sector is gradually shifting beyond simply meeting the regulatory threshold.
The bigger question now is which banks will emerge stronger after the recapitalisation exercise.
Experts believe the final weeks could bring dramatic developments, including mergers, strategic partnerships and last-minute fundraising deals.
If some systemically important banks remain undercapitalised as the deadline approaches, market watchers warn that the closing days of the recapitalisation exercise could trigger major consolidation across Nigeria’s banking industry.
Source: Getty Images
For now, the sector waits anxiously, as the countdown to one of the most consequential regulatory deadlines in Nigeria’s financial history continues.
Three Nigerian banks yet to meet capital requirement
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has revealed that three Nigerian banks are yet to meet the new minimum capital requirements introduced as part of its banking sector recapitalisation programme.
The disclosure comes just weeks before the regulatory deadline of March 31, 2026, raising attention across the financial industry as institutions race to comply with the new capital thresholds.
According to the apex bank, the majority of lenders have successfully strengthened their capital base, with only a small number still undergoing final verification of their financial positions.
Source: Legit.ng
